Amalgamations to be considered by panel

Voluntary amalgamations will be considered by an expert panel set up to examine the future of cash-strapped councils in NSW.

Almost half of the state's councils are struggling financially and the independent panel will advise the government on how to make the system viable.

The three-member panel will report back in 12 to 14 months and has been asked to consider a number of changes, including voluntary amalgamations.

Local Government Minister Don Page on Tuesday said government policy was opposed to forced amalgamations.

"We do have some situations across the state where it is probably not appropriate to live with the existing boundaries," he told reporters in Sydney.

"We have 152 councils in this state - almost half of those councils are struggling financially.

"So we need to move forward with new structures."

Mr Page pointed to inconsistencies in the current system, which did not take into consideration the number of people living within a council's boundaries, or how big those boundaries were.

"We have a large ratepayer base at Blacktown Council (with) 200,000 ratepayers," he said.

"We have a small council like Urana (in the state's southwest) that has 2000 ratepayers.

"Geographically, we have Hunters Hill which is only seven square kilometres.

"At the same time we have Central Darling Shire which is 55,000 sq km, and yet the current Local Government Act treats all these councils as though they are the same."

The president of the Local Government Association, Keith Rhoades, said setting up the panel was a "very historic day for local government".

"No rock will be unturned when it comes to investigating all matters that affecting proper conduct and delivery of services to communities right across NSW," he said.

"Every issue is on the table."

Shires Association of NSW president Ray Donald said councils needed more money if they were to remain financially viable.

"The expectations on local government are immense, particularly in these smaller rural communities," he said.

"If we have more funding to service our communities, we provide a better situation for their future."

Sydney Business Chamber's Patricia Forsythe renewed calls for the amalgamation of the city's 41 local councils.

"Forty-one councils is an antiqued structure for a modern global city and it should be reduced to somewhere in the region of 10 larger, better resourced councils that reflect the economic centres within the global city," she said.

"An independent review of how local government in Sydney is functioning and, more importantly, whether it is holding back the economic growth and success of Sydney is long overdue."

The expert panel will be chaired by Graham Sansom, who is director of Sydney's University of Technology Centre for Local Government.